The facts in Diener No v Minister of Justice and Others (2018) 1 ALL SA 317 (SCA) were as follows:
On the 13 June 2012, the members passed a resolution placing the JD Bester CC into business rescue in terms of Section 129(1) of the Companies Act 71 of 2008, and the appellant Diener was subsequently appointed as the business rescue practitioner. In August 2012 he decided that CC could not be rescued and instructed an attorney to bring an application in terms of Section 141(2)(a) to convert the business rescue proceedings into liquidation proceedings. A dispute arose as to how the fees of the business rescue practitioner should be dealt with. One of the respondents (the appointed co-liquidator) was of the view that the business rescue practitioner failed to prove a claim against the estate in terms of Section 44 of the Insolvency Act 24 of 1936, and that the attorneys were unsecured creditors and therefore liable for contribution in terms of Section 106 of the Insolvency Act.
The business rescue practitioner applied to court to set aside the Final Liquidation, Distribution and Contribution Account, the dismissal of this application lead to the present appeal.
The issues to be decided were the order of preference of the business rescue practitioners claim for fees and disbursements in liquidation, a determination of the date of liquidation, and whether the business rescue practitioner is required to prove a claim in terms of Section 44 of the Insolvency Act.
Having regard to Chapter 6 of the Companies Act, the court held that a business rescue practitioner’s claim for fees ranked after the costs of liquidation, but before those of post-commencement claims for wages by employees and secured and unsecured post-commencement finance and was payable from the free residue of the estate.
On the second question the court held that the effective date for liquidation was the date on which an application for liquidation was filed.
Finally, any creditor who wishes to share in the distribution of an insolvent estate is required to prove a claim.
The appeal was dismissed with costs.
Written by : Stacy Saffy (LL.B; AIPSA Ins. Law)